UK inflation accelerated more than expected in November, reaching its highest level in over two years. The growth of consumer prices accelerated from 0.9% yoy in October to 1.2% yoy in November, as the increase has been encouraged by more expensive clothes and fuel. This is the highest value since October 2014, as the economists expected growth of 1.1%.
The data of the National Statistics Office show that inflationary pressures are encouraged by the cheaper pound and soaring fuel. The import prices jumped by nearly 15% in November, which is the biggest increase on an annual basis for five years.
The abrupt change in the outlook for prices in recent months prompted the Bank of England (BoE) to change its position. The regulator first lowered interest rates by 25 basis points to 0.25% and was able to relieve another monetary policy. At its last meeting, the bank signaled that the end of the year will not change the interest rate. On Thursday is the last meeting of the BoE this year.
On a monthly basis prices rose by 0.2%.
The data from the National Statistics Office shows that manufacturing inflation accelerated to 2.3% on an annual basis, which is the highest value since April 2012.
The majority of respondents economists believe that the next action by the central bank will be in the direction of raise rates as monetary policy tightening should keep up with inflation. The growth in consumer prices is expected to exceed 2% in early 2017.
The core inflation in UK, which excludes volatile prices of food and energy, accelerated from 1.2% in October to 1.4% in November. This is above expectations for growth of 1.3%.